A film depicting the beating to death of a toddler by two boys will be shown at a Sydney film festival after it was approved by the federal government body responsible for the classification of movies, computer games and certain publications.

The film, Playground, will screen at the Sydney Underground Film Festival on Friday under a law that permits a film festival to exhibit unclassified films provided it is registered with the Department of Communications and the Arts and meets various conditions.

Festival director Stefan Popescu said the Classification Board had granted an exemption to the festival to screen unclassified films - including several depicting graphic sex and violence - without asking to view any of them.

Popescu included Playground in the festival despite saying he could not watch the graphic scene, which depicts two boys savagely beating the toddler before laying his body on a railway line.

The scene in the Polish movie recalls the 1993 murder of two-year-old James Bulger by Jon Venables and Robert Thompson, both 10, in the British city of Liverpool.

"My immediate reaction was visceral and emotional," Popescu said. "I had to have an hour-long internal discussion with myself, to work out what angered me so much, and if it had enough discursive merit to be programmed."

Playground was screened in Melbourne last year as part of Monster Fest.

Festival organiser Grant Hardie, the owner of Monster Pictures, said the scene depicting the killing of the toddler was not exploitative: "The film-makers have understood the full effect that it would have in the audience so have decided to treat it cautiously.

"There was pretty much a stunned silence in the audience at the end," he said. "Some audience members did seem angry and upset, but mainly shocked looks and silence."

The Sydney Underground Film Festival will also screen Kuso, a film depicting an abortion, bodily functions, and graphic scenes of mutilation and sexual violence.

???"It's got near every possible offensive thing in the film, so I guess there is a real chance that the censors would get up in arms about it," Popescu said.

Described as "the grossest movie ever made", Kuso prompted viewers to walk out when it was screened at the Sundance Film Festival earlier this year.

"Think of every potential trigger-warning and this film has it covered," Popescu added.

A cockroach emerging from a body orifice, actors fornicating with puppets and animated characters, and scenes awash with bodily fluids - presented with deadpan humour - are among the tamer episodes in Kuso.

The film by electronica musician Steven Ellison, known as Flying Lotus, is set in a post-apocalyptic Los Angeles whose inhabitants are afflicted by a disease that disfigures their faces with boils.

"If you can make it through the first three minutes without vomiting, passing out, becoming violently angry or leaving the cinema, you will have a religious experience," Popescu said.

Popescu said his tolerance for certain movies has changed since he became a parent.

"It came as quite a surprise to me, as I used to pride myself on being able to watch the most abhorrent subject matter in film and not lose any sleep over it," he said. "But since having a child I found that I can't watch anything pertaining to the abuse of children."

But he added: "My new-found lack of tolerance has not changed my views on censorship and what I feel that should be up for viewing and discussion by adult audiences. As a programmer, I still have a responsibility to put audience expectation and experience beyond my own personal tolerances."

Popescu said the Classification Board's new exemption system "shows a cultural maturity and places the responsibility on the community around film festivals".

However, he said there had been a historical tendency to censor sexual content, but not violence.

"The Classification Board have an issue with the intersection of sex and violence," he said. "I think this year's program will be a good litmus test to see how relaxed they have become with their attitudes, sinceKuso is undoubtedly one of the most outrageous titles to hit the shores of Australia."

The Sydney Underground Film Festival is at the Factory Theatre in Marrickville from September 14 to 17.